Market Stabilization Rule: Overview
On April 14th, 2017, the Department of Health and Human Services issued a new ruling under the ACA. This new rule is called the Market Stabilization Final Rule. Its goal is to lower premiums and stabilize both the individual and small group insurance markets. Due to the rising cost of premiums, the new rule takes steps to address the underlying causes. These steps include: shortening the annual open enrollment period, requiring documentation for enrollments made during special enrollment periods, and clarifying guaranteed coverage. The rule also gives states the power to determine if health plans meet the criteria for a qualified health plan. These changes will all take place effective 2018.
What are the most important details?
First, the new rule shortens the annual open enrollment period for the individual market. The new enrollment period will be November 1st 2017 – December 1st, 2017 for the 2018 plan year. The goal here is to bring the open enrollment period in line with the small group market. Ideally this will encourage people seek the best option come open enrollment time. It also hopes to cut down on adverse selection by limiting the enrollment time. Because of the shortened enrollment time, and the change from what the enrollment period was before, the new rule allows individual state exchanges to allow a special enrollment period, which would extend the enrollment period, if they wish.
Another measure to help decrease premiums is to require documentation for those enrolling due to a special enrollment period. Before, an individual wanting to enroll simply had to attest that they were losing coverage to enroll. Now, due to abuses of that system, the exchanges can require proof of the reason for the special enrollment. This can include a COBRA letter, marriage, death, or birth certificate, etc.
Finally, the Market Stabilization Rule clarifies the meaning of “Guaranteed Availability” as mandated by the ACA. Before, the ACA required carriers to offer coverage to anyone who applied. However, it was unclear if carriers had to still offer insurance to those who failed to make premium payments. The new rule allows carriers to withhold coverage from those who have failed to make payment until those payments are made. Not only should this help keep the insurance carriers profitable, but it also provides a reason for consumers to avoid a lapse in coverage.
How Will This Impact You?
If you are in the individual or small group market, the Market Stabilization Final Rule will influence your open enrollment. The enrollment time is shorter than before, so it will be important to move quickly come open enrollment if you are looking for a plan. Further, because the new rule requires documentation for enrolling during a special enrollment, there are more steps involved in the process. Now, more than ever, it is important to have someone who is on your side when navigating the insurance market.
The Morgan Planning Group is ready and able to be your advocate, to make sure that during a confusing and stressful time, you have all the help that you need. If you think that you will be in the market for individual insurance during open enrollment, Linda Presler, our resident expert on individual insurance would be happy to help. Linda can be reached at 612-492-9389, or at linda.presler@morganplan.com.